Strategic sale an option says receiver

Strategic Finance's receiver says the finance company's assets could be sold to an outside party, but that receivership work on Strategic's troubled loan book is the immediate priority.

Strategic's trustee Perpetual appointed PricewaterhouseCoopers partners John Fisk and Colin McCloy as receivers for Strategic on Friday.

Mr Fisk said yesterday that the receiver had already seen outside proposals for the assets of the failed finance company and a sale would potentially be an option under receivership.

But it would probably be several weeks before any process to deal with such offers from outside parties could be put in place, he said. The immediate focus was on chasing some of Strategic's troubled property and property development-based loans.

Finance industry broker Chris Lee said South Canterbury Finance had indicated it was considering an equity-for-debt swap to give Strategic investors shares or equity in SCF in exchange for the company's assets.

"If they did a debt-for-equity swap with Strategic, it would mean an increase in South Canterbury's capital of maybe $150 million or $200 million. People would be agreeing to swap what they're owed by Strategic for shares in South Canterbury. Maybe they'd be [listed] preference shares initially," Mr Lee said.

South Canterbury Finance chief executive Sandy Maier said SCF had been in talks on transactions with a range of players, not just in the finance company sector.

"We said a long time ago there will have to be an equity raising, whether it be an IPO or any range of other things, and that's kind of still where we're at."

But the idea was yesterday dismissed by another industry analyst.

Hamilton Hindin Greene director Grant Williamson said any such deal with SCF would be a disservice to the 13,000 Strategic investors – owed $417 million.

They would be better served by a wind-up of the company by the receivers.

He pointed to a comparable situation involving investors in Hanover Finance agreeing to an Allied Farmers plan to swap bonds for Allied shares, which then lost value.

"There's nothing in it for Strategic Finance debenture holders to go down that track – as we found with Hanover, look what's happened with [Allied shares]," Mr Williamson said.

- © Fairfax NZ News